Navigating the Data Sourcing Conundrum


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In today’s digital big data world, we have seen an exponential increase in the sheer amount of data that is available to marketers to use to fuel their customer-centric strategies and programs. Procuring third-party data to enrich one’s customer base and fuel audience selection for prospecting activities continues to be core to CRM activities in today’s omni-channel marketing ecosystem. Over the years, we have witnessed the exponential increase in the sheer amount of data that is available to the marketer and the number of companies whose business models are predicated on originating, creating, and repurposing marketing data for resale. And yet, it’s interesting just how little time is spent by marketers objectively evaluating the vast array of providers and sources. With so much diversity in available data – data whose impact on marketing programs is easily quantifiable – I continue to marvel at the preconceived notion that you need only buy from one source.

With all the possibilities to leverage data in the creation of meaningful, personalized customer experiences, why on earth would marketers limit themselves to securing data from one single data company? Every data company has its strengths – and its weaknesses. And there is certainly no single provider of data in the entire world that can supply the marketer with everything they need to optimize the performance of all of their marketing efforts that led them to seek out third-party data in the first place. The data industry has evolved far beyond the days of “everyone has a big compiled file of demographics and firmographics to areas of specialty – demographics, digital intent data, social influence, purchase transactions, etc. No one has it all and no one ever will – as soon as a data company adds the latest “hot” category of data to its arsenal, another “hot” category emerges, and there is no end in sight. This is the marketer’s new reality and what’s needed is a sourcing discipline that is nimble, flexible, and continuously in the know concerning developments in the data ecosystem. So why do we continue to see marketers issuing RFPs for data services? The only winner in such a process is the data company who gets selected, not the marketer – as we’ve already asserted, there is no way to get the very best and most complete data you need as a marketer by purchasing it from one data company.

Most companies still primarily single source their critical third-party marketing information due to many reasons: an inability to truly evaluate the landscape properly (this is no different than having to be an expert in every piece of CRM-enabling software available), a fear that multi-sourcing may be too expensive, loyalty to a particular company that “you’ve always bought from” in the past, or simply not enough time in the day to do the necessary research in order to become an expert in the data space, The question is, “how does one implement a successful data-sourcing strategy?” Here are some tips how to successfully leverage third-party data as a strategic asset to drive quantifiable business results:

• Don’t try this at home – You are experts in your business, not the world of third-party data. Furthermore, you don’t have the time to properly evaluate the hundreds and thousands of sources of information objectively. Your data-driven marketing agency should be an expert in this area – rely on them to work with you in an objective manner to bring their expertise and experience into play. You know your business, they know the data ecosystem. Working together to find the best source mix of information for your business should be your number one priority.

• Always multi-source – Not only will you create a data asset that provides you with a strategic advantage over your competitors, it will also provide you with pricing leverage as each data company will constantly be vying for a larger share of the pie. Data companies are greedy by nature – after all, their products carry extremely high margins. They do not share well – they have a hard time understanding that their product arsenal could be missing something you need, and when they realize that your budget is going to likely be split up across multiple providers, they will offer you everything they have – even if you don’t need it – rather than be happy with the portion of your budget they are going to receive.

• Understand that it’s a game of love you and leave you – Any data company or list broker that promises to be “there for you” after the transaction is just telling you what you want to hear. It’s not that they are bad people – not at all. It’s simply that their business model necessitates that they take the products they manufacture and sell them to as many customers as they can. Big sales quotas, big commissions, and a ton of pressure from sales management render service as an afterthought. When you have questions about the data, find discrepancies, or need other support, see how long it takes to get answers compared to how long it took to put a proposal in front of you during the courtship process. Again, your data-driven agency partner is better suited to “handle” the suppliers than you are. They have the experience, the analytical capabilities, and the clout to keep the source providers working hard to ensure you renew their business.

Putting a data-sourcing process in place that will optimize the value you receive on your data spend takes discipline, focus, and, in many cases, organizational change to implement. Having said that, it isn’t as difficult as putting someone on the moon.

Marc Fanelli
Marc leads the Global Data Solutions group at Merkle, which is focused on helping clients utilize marketing data to optimize their strategic CRM initiatives across the globe. Marc leads a team focused on the development of quantitative-driven data usage strategies for clients including 3rd party data procurement, acquisition marketing, global segmentation development, and campaign strategy and execution services. Marc is a 20-year direct marketing industry veteran whose creative solutions have helped world-class brands including American Express, Citibank, Dell, Marriott and Microsoft.


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